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Edith Ramirez, chairwoman of the FTC, today recommended a
comprehensive investigation of patent-assertion entities,
companies often called "patent trolls" due to their aggressive
and legally questionable tactics. Patent trolls buy patents from
technology innovators and threaten to sue other companies who
they claim are infringing on those patents. They typically do not
use the patents in any products themselves.

Patent trolls have long been the bane of tech startups, but
recently they have been targeting many other types of businesses
as well. Retailers are the most common low-tech targets, Ramirez
told the audience at the National Press Club in Washington, D.C.
Any business that incorporates tech into its products is at risk,
she said. "Even hotels and coffee shops [that offer wi-fi] are
not immune."

The inquiry Ramirez intends to launch could uncover data and
evidence to be used by Congress, federal courts, the Department
of Justice and other agencies to combat the harm caused by patent
trolls. For instance, she urged the Patent and Trademark Office
to begin requiring that the owners of patents to disclose their
identities and keep updated records of that information.
Increased transparency may help prevent overly broad claims and
curb patent trolls' practice of hiding behind shell companies.

Courts have a key part to play in the fight against patent
trolls, by penalizing patent trolls for bringing frivolous
claims, Ramirez said. Patent trolls are now responsible for 62
percent of all patent-infringement lawsuits, up from 29 percent
two years ago, according to a recent
White House report.

Ramirez acknowledged that there are "plausible upsides" to
patent-assertion entities, at least in principle. For example,
she said, they can help failed startups to make money off their
patents, allowing investors in those companies to see a return of
some kind despite the companies' closing their doors. But these
benefits are largely absent when considering actual patent-troll
activity, Ramirez said.